Have you considered making an investment for growth, but don’t feel that your company is quite ready?
Capstone Capital Group, LLC and Trend Consulting Group have partnered to offer their clients an additional layer of financial and management support. This additional support is designed to help their clients increase their scale of operations efficiently and profitably.
Our primary goal is to help our clients accelerate and achieve their growth initiatives on a profitable basis. The two prong approach will sustain our client’s growth in the long term. To accomplish sustainable long-term growth most companies require competent management and additional capital. Our additional layer of support provides both essential ingredients to our clients’ success.
Today’s Real Estate and Construction Markets require a high level of performance from contractors. With elevated performance levels our client’s resources are stretched thin. We have found that without proper funding and management support most growing contractors are left with two options neither of which should be acceptable to companies that are trying to grow profitably
Turn down new business and increased demand from existing customers because your company is at capacity and does not possess the capital, internal process, nor the project management in the field to confidently deliver on your contractual obligations.
Accept more new business than your company can handle only to realize your existing clients will suffer and that you’ve set your company up for losses, negative brand impact, and a reactive business model which typically leads to insolvency or in some cases much worse!
The Goal of our partnership is twofold:
1. To give our growing clients access to the funding they need when they need it through Capstone’s flexible single invoice factoring and funding solutions.
2. Deliver effective project management outsourcing solutions through Trend’s comprehensive reporting, process, documentation, and effective field management model.
This one two punch of strategic resources is designed to ensure you are well prepared to grow your business effectively and profitably while boosting your company’s brand and reputation.
Capstone deploys Single Invoice Factoring Programs to fund General Contractors and Subcontractors to ensure on time performance of tasks. Capstone specializes in Single Invoice Factoring (“Spot Factoring”) for firms in need of immediate cash. We provide flexible, no contract invoice purchases in exchange for working capital. Our highly experience construction professionals are on staff to facilitate the purchase of construction related accounts receivable. They have operated on job sites as project managers, so we understand how critical it is to have available funds for payroll, suppliers and operating expenses. Knowing that Capstone will purchase your invoices provides you with the confidence to bid on new jobs and grow your business.
Trend strives to improve our client’s overall experience while engaging in a new construction project(s). Our goal is to change the “USUAL” way construction projects are managed and improve the process through our comprehensive project management services. We put a heavy focus on process and documentation while managing our client’s projects. This is accomplished by incorporating our cloud based project management software to help boost overall project efficiencies. Our service also includes automated reporting capabilities to ensure all parties are well informed every step of the way throughout the duration of their project.
We look forward to hearing from you.
Invoice factoring is a common practice that enables businesses to receive immediate payment in exchange for selling accounts receivables at a discount to their face value. Once an invoice is“ “Factored” and it is time for the customer pays for a product or service, the payment is forwarded to the factoring company. One of the most significant advantages of factoring is that businesses can receive immediate cash flow with no additional debt that appears on balance sheets. Therefore Factoring is an off balance sheet transaction. Factoring can also be advantageous for businesses looking to obtain initial working capital without having to demand immediate payment from their customers.
The Invoice Factoring Process
Factoring is a rapid process that usually takes less than 24 hours to complete. The factoring process starts after a business delivers a product or service and sends an invoice to their customer. A copy of the invoice is then sent to the factoring company, which will purchase the invoice in exchange for an immediate cash payment. Most factoring companies offer up to 80 percent of the invoice value with the balance going into a reserve account. Once the purchase of the invoice has been completed, businesses can have the money, minus nominal fees, sent directly to their bank account.
Advantages of Factoring
Many businesses choose to use factoring because it can provide a predictable, immediate revenue stream than can be used to fulfill an order. While many businesses request prompt payment, they can rarely expect it in the real world. Even when discount incentives are offered, many customers will still choose to pay later. These problems can be especially challenging for newly established businesses that struggle to convince customers that they can deliver. Businesses that use factoring can receive immediate revenue without having to demand upfront payment or incur excessive risks.
Additional advantages of factoring with Capstone include:
How Factoring Affects the Bottom Line
Factoring fees are an average of about two percent, which many business owners argue can add up to a lot of money in the long run. In reality, most businesses that use factoring can earn several times more than the factoring fees that they pay. Studies indicate that a majority of businesses can scale their production capacity by more than 25 percent without increasing fixed costs. Since limited capital is the primary constraint for most businesses, immediate payment can enable businesses to operate at full capacity and earn several times more than the factoring fees.
Business Requirements for Factoring
As with any other credit service, businesses will need to be pre-qualified. Factoring services are only available to legal business entities that sell business-to-business services to governments or other companies. Businesses will need to have customers with good credit to qualify for a factoring service. It is also important to have no outstanding invoice leans. Most businesses that meet these basic requirements can be approved to take advantage of invoice factoring services.
In 2008, when the American housing market crashed, it created a ripple effect in financial institutions. When the Dodd-Frank law went into effect in 2010, its purpose was to “promote the financial stability of the United States by improving accountability and transparency in the financial system.” Since being passed, only one new bank has opened in the United States. To show some perspective, in the 30 years prior to Dodd-Frank, over 100 new banks opened.
The new regulatory requirements are the reason behind this. Banks have had to hire full-time compliance employees in addition to purchasing new software and computing systems, as well as creating regulatory reports. FDIC state examiners are cracking down on banks and thoroughly investigating software systems that are within regulatory restrictions for loan reviews, IT, anti-laundering practices, cyber security and low-income borrowing procedures.
In looking at the impact this has caused, it’s clear that due to increased expenses, no startup banks want to take a risk when the odds are stacked so highly against them. In a statement earlier this year, Senate Banking Committee Chairman Richard Shelby said that improvements to rules impacting small banks should be made. However, if changes aren’t made, what does the future of startup banks look like? Furthermore, what will lending options look like for small business owners?
Fortunately, no matter what the future holds, Capstone Capital Group, LLC can be your capital partner. For years, we have helped growing businesses get the immediate cash they needed without the typical red tape that most banks require. We provide you access to capital through one of our customized funding programs, allowing you to scale your business instead of worrying about finances. For more information on invoice factoring, purchase order factoring, give us a call today at (212) 755-3636 and speak to a representative.
Over the past few years, there have been attempts to change the composition of the Consumer Financial Protection Bureau (CFPB), even its name. Now, a new bill might truly pass Congress.
Introduced by Republican Representative Randy Neugebauer for the state of Texas, H.R. 1266 would create a five-member commission structure to lead the CFPB, which is currently headed by Director Richard Cordray.
Neugebauer’s proposed bill lays out the framework for creating a bipartisan commission leadership structure. Included in the bill is a provision that no more than three commissioners can be members of one political party. This is so that there are not coinciding vacancies when terms end.
Additionally, Neugebauer’s bill readjusts CFPB executives’ pay to the federal scale as well as creates an official seal for the agency. There is also a proposal to change the name of the CFPB to the Financial Products Safety Commission.
Much support has already been garnered for Neugebauer’s bill. The legislation was introduced with 20 initial co-sponsors, all Republicans and all members of the House Financial Services Committee, on which Neugebauer serves.
A coalition of banking and business groups including the American Bankers Association and the U.S. Chamber of Commerce expressed their support in a letter that read, “We believe that a five-member commission, as Congress originally intended, will better balance consumer access to financial products with the need to ensure a fair marketplace.”
Because Republicans control the Senate, a bill passed by the House is expected to pass even without Democratic backing. However, a coalition of more than 300 interest groups is in strong opposition to the bill, defending the CFPB.
Capstone Capital Group, LLC has eliminated the bank red tape by offering small to mid-sized businesses Single Invoice Factoring (“Spot Factoring”). Businesses can now get the immediate cash they need in exchange for working capital from Capstone Capital Group. For more information on Capstone’s Single Invoice Factoring call us today at (212) 755-3636.
We have written numerous times about how the Dodd-Frank “Too Big to Fail” legislation is hurting smaller banks and interfering with loan approval for your small and medium-sized businesses.
Much of the regulation was designed to stop large money-center banks from taking depositor’s money and executing risky investments or engaging in risky transactions, which would thereby place the public at risk as well as the US financial system.
However, the unintended consequence of the law has created significant regulatory pressure on small and medium-sized banks, which has caused the regulators to take a one-size-fits-all approach to bank regulating. We can all agree the risks facing small and medium-sized banks are different than those facing the large money-center banks.
Compliance costs alone eat into the profits of the smaller banks, whose scale is smaller and has less profit than more major banks. The portfolios of the smaller banks are vastly different than those of larger banks as well. Most small banks lend into their communities and can assess the economy and risk related to their portfolio first-hand. This is not possible for the larger banks, as their footprint spans either a region of the US or the entire US. This leads to centralized decision- making with computer aided modeling to ensure that the loans are underwritten as conservatively as possible. Though not a negative thing, it’s different from how smaller banks are chartered to operate.
In most cases, the three “C’s” are used in small bank lending because the small town banker knows his customer. Credit, Character, and Collateral are what the small town banker relies on. Federal regulations do not see it the same way, causing conflicts between operation and management. The best way to manage it is to reduce the amount of loans and use the most rigid standards, which do not help the community that these smaller banks are chartered to help.
Congress has been listing to these smaller banks and indicated they would enact legislation to reduce the regulatory burden so they could operate like they should. It is important to note that very few smaller banks were affected by the financial crisis. The Republicans are attempting to provide relief for smaller banks while Democrats require that all of the Dodd-Frank provisions be in place for every bank regardless of size.
The Fed supports the changes for small and regional banks. However, it does not seem that these smaller institutions will be released from the “Too Big to Fail” category any time soon. As the economy continues to grow, and your need for working capital increases, please remember to call or email Capstone Capital Group, LLC at (212) 755-3636 or [email protected]
For the first time since 1997, the job market has seen more than one million new jobs created over the last three months. This is the most significant indicator of economic growth to come. The last five years have been volatile, with many finding it difficult to find appropriate work at livable wages. The accelerated job growth rate is the most promising indicator that our economy is finally emerging from the doldrums of lackluster growth.
Although the indicators of economic growth are not spread worldwide, the trend in the United States is flourishing. This trend is positive for workers who are currently employed but have not had the benefit of any significant wage growth. Leverage on salary and hourly rate negotiations are moving in the direction of workers. As the unemployment rate continues to decrease, the pool of qualified workers is being reduced. This will encourage employers to give existing workers raises either for retention purposes or to reduce the cost of training new workers whose performance may not be known until a significant investment of time and money occurs.
Typically, US consumers fuel the world’s economies through consumption and consumer spending. And because of the strength of the domestic job market is so strong, the Federal Government feels more comfortable raising rates. The criterion they are monitoring is wage growth, which climbed 0.5% in January (up 12 cents to $24.75 per hour and 2.2% over the past 12 month). Combined with hiring momentum, the indicators of growth the Fed has been monitoring make a case to raise interest rates.
Prior to the great recession caused by the financial crisis, and ensuing federal regulation, growth rates in the US were approximately 3% per annum. At 3% per year, the growth rate was deemed positive and indicated a stable and growing economy. Currently, growth is approaching 2.5% and is encouraging economists that this will not be a cycle where there a growth spurt is followed by a decline. One of the indicators economists are hanging their hats on is that workers have started to leave jobs in search of higher pay. This indicates that employees have confidence in the economy, and that moving to a new employer does not bring the risk of layoff should growth rates drop. Employees believe that the economy will continue to grow and their job stability is not at risk.
Of course, there are still headwinds that face the US economy, but it is more sector-related. Construction, manufacturing and healthcare are all major sectors of our economy that are hiring new workers. It is time to harness this growth and bid on new contracts, create product line extensions to sell more goods or services to your existing customers, and find new companies that will benefit from working with you.
Capstone Capital Group, LLC has eliminated the bank red tape by offering small to mid-sized business Single Invoice Factoring (“Spot Factoring”). Businesses can now get the immediate cash they need in exchange for working capital from Capstone Capital Group. For more information on Capstone’s Single Invoice Factoring, commercial financing call us today at (212) 755-3636.
Since June of 2014, oil prices have declined by over 40% causing the US dollar to surge in value against most other currencies throughout the world. This may have had a negative impact on the oil patch and US exporters, but it is creating greater disposable income for the middle class. According to the New York Times, “Lower energy prices especially with the cold winter we have all been experiencing have been a benefit to all.” The increased value of the US Dollar also increased consumer purchasing power. If the Fed follows through on increasing interest rates mid-year as is anticipated, we will see oil prices drop and watch the dollar strengthen. Initially, there was a concern over deflation, but growth is mitigating that potential problem.
“The forces that were fueling the creation of wealth and leaving the middle class behind were high oil prices, easy money and a weak dollar. Two of the three forces have been quelled that being, high oil process and the weak dollar,” according to the New York Times.
As a result, capital inflows into the U.S. will occur. The economies of the G-20 are all in negative growth or slow growth phases due to high social welfare policies and high taxes. The capital inflows will help create demand in our economy and cause growth as businesses take this capital in and use it to expand.
These trends work in favor of job creation, higher wages and business growth. As was mentioned in our last blog, the low business formation rate over the last six years has reduced competition and given many small businesses the ability to move from start-up to entrenched businesses. These businesses are poised for economic growth and wealth creation. Add to this the upcoming presidential election that will be in full swing by the middle of this year and optimism should prevail through most of the economy.
If it looks like the next president will be friendlier towards business, you will be in for a great period of growth even if policies do not change. The fact that we will have a new leader who at least supports business growth will have a tremendous impact on growth and overall sentiment regardless of which party controls the White House or Congress.
It is imperative that you continue to invest in your business and increase your infrastructure to handle increased demand for your goods and services. Position your company to ride the growth wave as other have in the mid-1980s, late 1990s and early 2000. For years, we have helped organizations get the immediate cash they needed without the typical red tape that most banks require. For more information about our Commercial financing, Single Invoice Factoring, give us a call today at (212) 755-3636 and speak to a representative.
Through the use of Capstone’s unique funding programs, our clients take advantage of opportunities that would otherwise be lost as a result of being undercapitalized. One of our most recent success stories is an interior design firm that was the successful bidder for a Fortune 100 pharmaceutical firm. They required a renovation of the electronic skylight shades for the employee cafeteria.
See Our Current Case Studies Here
The challenge our client faced was a lack of credit, which made the matter a COD transaction. Because the transaction size was in the six-figure range, the client would have had to forgo the opportunity entirely, were it not for access to capital. Prior to receiving the order, the client applied for a funding facility with Capstone Capital Group, LLC. When the order was received, the client was entered in our system and we began assisting them immediately.
Long lead-time was another client concern. The order was placed in early November with a late January installation date. The COD terms required a significant sum of money to be tied up for about 90 days if the terms were kept at COD. Capstone entered negotiations with the custom shade manufacturer with the client’s participation and arranged for credit and payment terms that were acceptable to all parties. In the middle of January, the shades shipped to an authorized installer’s warehouse as part of the transaction negotiated by Capstone. Following a few pre-installation meeting with managers of the physical plant, the shades were delivered to the site. The old shades were demolished and remove and the new shades were installed.
As a result, the work was completed and accepted by the Fortune 100 Company, fulfilling the contract between our client and their customer. The client billed the account, Capstone factored the invoice and in March, Capstone will make final settlement with the interior design firm.
The key points to take away from this case study are as follows:
-Capstone client receives six-figure interior design contract and needs capital.
-Capstone client on COD terms for entirety of project with vendors.
-Capstone works with client to create liquidity and structure a PO Finance transaction to create credit with all vendors.
-Custom goods are ordered.
-Custom goods are received, demo is completed, and new shades are installed.
-Work is accepted and completed by Fortune 100 customer.
-Customer is billed.
-Invoice is factored, retiring the PO advances.
-Client receives working capital.
-Accounts receivable is collected.
-Client receives profit.
-100% leverage, 100% of the time.
Capstone Capital Group, LLC provides clients with the capital they need to fund projects. For years, we have helped organizations get the immediate cash they needed without the typical red tape that most banks require. For more information about Capstone and our Single Invoice Factoring, give us a call today at (212) 755-3636 and speak to a representative.
Last year, small businesses made capital investment decisions over “whether an expiring tax provision, Sec. 179—which allowed for $500,000 of accelerated depreciation for equipment purchases—would be continued, or whether a scaled-down version with a much lower threshold of $25,000 would take its place,” according to The Wall Street Journal.
In December, Congress reinstated the larger Sec. 179 deduction for 2014, meaning that small businesses were pushed to make decisions surrounding equipment purchases before knowing what the tax provision stated. On the first of January, the deduction dropped back to $25,000.
Such temporary tax and budgetary policy making creates roadblocks for consumers and business to plan and invest in the future. Comprehensive tax reform and annual federal budgets are a necessity for businesses to plan their capital investment and capital expenditures budgets. Inevitably, legislation creates economic ambiguity. In order to improve the economic outlook, more stable laws are vital.
Capstone Capital Group, LLC helps clients build sturdy outlooks for their economic future by providing robust services. For years, we have helped organizations get the immediate cash they needed without the typical red tape that most banks require. For more information about our business funding solutions, Single Invoice Factoring, give us a call today at (212) 755-3636 and speak to a representative.